BHP Billiton coy on Gag Island nickel plan
BHP Billiton coy on Gag Island nickel plan
Dow Jones, Melbourne
BHP Billiton Ltd. remains guarded over whether it intends to
develop a controversial open-pit nickel mine at Gag Island in
Indonesia.
BHP Billiton's stainless steel materials unit president, Chris
Pointon, said no thinking has taken place around Gag Island,
given the Indonesian government has yet to formalize any move
that would allow development to go ahead.
"We actually have no plans at all to do anything on Gag for
the moment," Pointon told analysts during a teleconference call.
"We won't even think about it until the situation becomes
clearer - if and when it does," he said.
Pointon was speaking after the Anglo-Australian mining group
said it would spend US$1.4 billion developing the Ravensthorpe
nickel mine in Western Australia and the related expansion of the
Yabulu Refinery in the state of Queensland.
Last week, the Indonesian government moved to resolve five
years of regulatory confusion that has blocked some major mining
projects.
In a decree, President Megawati Soekarnoputri declared that
mining contracts signed for areas that later were designated as
protected national forests will be allowed to proceed, despite a
1999 forestry law banning mining in those areas.
The biggest among them is a A$1.2 billion project by BHP
Billiton to build an open-pit nickel mine on Gag Island, a remote
and thinly populated site in eastern Indonesia.
Environmental groups say they will continue to oppose that
plan because of fears that tailings from the mine could damage
one of the world's most diverse coral reef systems in the sea
around the island.
The United Nations is considering giving Gag Island a World
Heritage listing, after recently concluding the area's reefs
contain among the highest incidence of marine biodiversity in the
world.
BHP Billiton has previously indicated it won't develop the Gag
Island site if the area wins World Heritage recognition.
BHP Billiton has a 75 percent stake in PT Gag Nickel, the
operating company that seeks to conduct mining on Gag Island,
while Indonesia's PT Aneka Tambang owns the remainder.
The laterite nickel deposit of 216 million tons on the island
is estimated to be valued at US$800 million with an expected mine
life of 100 years.